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Cross-Cultural Negotiations

Ten Cultural Factors in Cross-Cultural Negotiations, with a U.S.-China example

leslie crabtree

on 30 March 2011

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Transcript of Cross-Cultural Negotiations

Cultural Negotiations:
A Studies Approach Within a Culture Cross-Cultural
Comparative 1. Negotiating Goal:
Contract or Relationship or 2. Attitudes to the
Negotiating Process:
Win/Win or Win/Lose or or 3. Personal Style:
Formal or Informal 4. Communication:
Direct or Indirect When I say "Yes",
I mean "YES" or When I say "yes",
I mean "NO" CULTURE is defined as the socially transmitted
behavior patterns, norms, beliefs and values
of a given community CULTURE can be seen as a
"silent language" which is needed
in addition to the spoken language
CULTURE serves as a "social adhesive" that
gives people a distinct identity as a community Israelis are direct:
The Egyptians interpreted
Israeli directness as aggressiveness
and, therefore, an insult
Egyptians are indirect:
The Israelis viewed Egyptian indirectness with impatience and suspected them of insincerity, of not saying what they meant versus 5. Sensitivity to Time Americans:
Time is Money High or Low? Japanese and
other Asian cultures Conflict Cross-Cultural
Negotiations 6. Emotionalism:
High or Low Displaying Emotions 7% words 38% paralinguistic 55% facial expression 7. Form of Agreement:
General or Specific General Principles Detailed Rules 8. Agreement Building:
Top Down or Bottom Up? Inductive Deductive 9. Team Organization:
One Leader or Group Consensus? 10. Risk Taking:
High or Low? Certain cultures are more risk averse
than others in deal making Rules and Laws Strong Central Authority Fear of Punishment These things lead to an unwillingess
to take risks A Communist Society
is one which has
these three elements In China, in 1949, Mao adopted the Stalinist version of Communism The collectivist society in China
was well suited to Communism but not to taking risks The Chinese traditional fear of "losing face" also inhibits risk taking Two examples from the Wyoff-CLQ negotiations show that some of the problems encountered were directly caused by differences between China and the U.S. in risk taking Example 1:
Narrow Slate or Broad Slate Wyoff prefers Narrow Slate because:
other companies don't produce it
China needs usage specific chemicals
growth potential for usage specific
no local (Chinese) source for them CLQ prefers Broad Slate because:
Chinese government doesn't like to take risks
Mr. Zhao nervous about failure
Chinese companies don't like to specialize
usage-specific chemicals have less demand How they solved the problem: What Wyoff did:
conducted seminars in Beijing
met with industry leaders in China
met with party officials to show good faith What CLQ did:
convinced party officials there would be no "loss of face"
arranged meetings between party officials and Wyoff
As a result, Mr. Zhao no longer felt personally at risk Example 2: Staffing U.S. companies are staffed only as needed In a communist society, everyone has a job The difference in attitudes towards risk taking resulted in opposing positions Wyoff's postion:
The Rizhao facility should cut its staff by two-thirds
all current workers would have to be screened before being retained The CLQ position:
all workers should be kept on in the new JV
Reduction in staff should be through attrition How they solved the problem What Wyoff did:
agree to let the facility downsize at its own pace
give training to each employee
screen only after one year What CLQ did:
no new recruitment or hirings
opened new plants in the area to provide jobs for those let go
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